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Should I finance a 3-year old car?
"Is it smart to finance a 3-5 year old used car. I've always gotten used cars, but I would like to get a newer car for my next car."
Johnny Puckett · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“It is a common misconception that you are going to lose money on a car if you finance it.
Whether you lose money depends on:
If you buy a car with a high rate of depreciation and finance it for 6-years at 10%, you will lose money.
However, if you pick a car that holds its value and finance the car for 6-years at 3% but pay the loan off in the first year, you will very likely make money on that car.
As long as you pick a
used car
that has a slow depreciation rate, get a good financing rate, and pay the loan off quickly, financing a three-five-year old car is not a bad idea.” View full answer
- Gregory R.
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